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US Core inflation: expected to abate in 2012

After falling to 0.6% in October 2010, its lowest level since the administration started calculating this data in 1958, year-on-year US core inflation bounced back to 1.6% by mid-year 2011 and to 2.0% in August and September, before inching up further to 2.1% year-on-year in October. We believe however that the trend is about to […]

US retail sales: a strong entry into Q4

Today’s nominal retail sales report for October suggests that consumption continued to grow solidly early in Q4. The gauge increased by 0.5% m-o-m in October, above consensus expectations (+0.3%).  Between Q3 and October, retail sales increased by a very strong 8.7% annualised, following a 4.6% rise q-o-q in Q3. On the back of lower gasoline […]

Don’t fight the Swiss National Bank

On 6 September, the Swiss National Bank (SNB) set a maximum value for the franc at EUR/CHF 1.20. After about two months, we can say that this exceptional operation has been successful. The Swiss franc has remained above 1.20 without experiencing any evident speculative attack. Moreover, early SNB criticism has waned because this operation has […]

Chinese inflation declines significantly in October

The Chinese tightening process to cool the real economy and tame inflation is showing an ever increasing effect. The October consumer price index, the main gauge of inflation, was published in line with expectations at 5.5% y-o-y, down from 6.1% in September. Food inflation slowed to 11.6% y-o-y, down from 13.4%. Non-food inflation decreased to […]

Euro Area: Time for big decisions is closer

PM Papandréou call for referendum was probably not planned. This is a desperate move to save his Government. A rejection of the Greek aid package could bring about a worst case scenario. But the referendum is far from certain. The Government could lose confidence on Friday. A new Government could emerge and appease markets. Meanwhile, […]

Europe: some respite from the debt crisis

As we do every autumn, Pictet’s Strategic Investment Committee’s October meeting was devoted to reappraising key underlying economic and market trends at work. Assessing what has happened over the last 12 months Broadly speaking, events of the last twelve months have unfolded in a manner more or less consistent with the secular trends we had […]

The euro area crisis summit of Wednesday is likely to disappoint

The work before the European authorities appears too huge to be solved in just a few days. The European crisis was not solved on Sunday and probably won’t be solved on Wednesday, when European heads of state are meeting once more. Five areas are currently in the focus of policymakers: sustainability of public finances, Greece, […]

British pound (GBP): Consolidating first, strengthening later

Long-term fiscal sustainability is a prerequisite for a strong currency. The British pound (GBP) is well positioned in this respect: the United Kingdom is ahead in its austerity cycle compared to other developed economies. This may prove damaging for growth in the short term and temporarily weighing on the GBP, but we think that the […]

United States: Manufacturing output grew robustly in Q3

The bounce back in US industrial production was quite sizeable in Q3, and encouragingly, not limited to auto production. The overall set of data confirms that the sharp deceleration in manufacturing output growth witnessed in Q2 was partly linked to temporary factors such as the supply-chain disruptions linked to the Japanese earthquake. Indeed, industrial production […]

United States: Strong retail sales in September and sizeable upward revisions for July and August

Nominal retail sales rose by a strong 1.1% m-o-m in September, well above consensus expectations (+0.7%). Moreover, figures for the preceding two months were revised sharply upward. August’ figure was revised from unchanged to +0.3% and July’s reading from +0.3% to +0.4%. Nominal retail sales: % change annualised: Overall in Q3, retail sales increased by […]

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